Credit reports keep track of your financial history and report everything from
loans to late utility payments. This report is kept by credit reporting
companies and is given to financial institutions when they want to check on what
kind of credit risk a potential borrower is. Even landlords and employers can
request this information so they can determine whether to rent property to or
employ the person in question.
There are three main credit reporting companies in the U.S., namely Equifax,
Transunion and Experian. Credit reports include things such as employment, loan
and credit history, collection records, bankruptcies and tax liens. All credit
card and loan records going back seven years show up on the report.
Credit data may be shown in various ways depending on where you obtained your
report. The most basic form of credit report is printed out with pages showing a
confusing array of abbreviations and codes that are only understood by lenders.
Fortunately, reports given to consumers are translated into formats that are
easy to read.
Information on your credit history is given to credit bureaus by lenders and
credit card companies via electronic transmission. The schedule for this
reporting is not fixed, but companies usually send updates every 30 days. Credit
reporting companies also receive reports from tax agencies and the post office
as well as courts. Most information stays on the credit report for seven years.
Some information, such as bankruptcies, can stay on record for 10 years.
In order to remove fraudulent, expired, or inaccurate information from credit
reports it is necessary to contact the credit bureau and submit a dispute
request. Each credit bureau will have to be sent a separate letter in order to
submit a dispute. Credit reporting companies have up to 30 days to take action
and investigate the dispute.
When the credit bureau confirms that the information is incorrect they will
remove it and send a letter with a credit report that has been updated. If the
correction cannot be confirmed they will send a letter with an explanation.
Information that is accurate cannot be removed from a credit report before the
set expiration date.
Credit reports are used by lenders, insurers, creditors, landlords, employers,
courts, cell phone companies and utility companies. There are "permissible
purpose" laws that allow these businesses to gain legal access to credit reports
so that they can evaluate finances and determine whether to grant a loan or
employ a person. Credit reports that have a clean record ensure that those
seeking a loan can obtain the best interest rates, while people with less than
perfect credit reports can expect to pay significantly higher interest rates.
Credit reports should be checked every 6-12 months so that any inaccuracies or
signs of identity theft can be spotted before major credit and financial damage
has occurred. Credit bureaus are required by law to give people free access to
their credit reports. This site is geared towards consumers in the United States.
For visitors in other countries, a site with information specific to your country
is necessary, since laws differ nationally.
For visitors from the UK www.lifeinsurancequotes.co.uk is an example
of a site dealing with services involving your credit (low insurance rates) and where
specific information can be obtained relevant to the UK.